Past Winner Stories
Indiana Oxygen
During the past three years, the weak economy hit the distribution industry very hard. Indiana Oxygen, an Indianapolis-based oxygen distributor serving the welding and gas industries, had watched its customer base erode and recognized that a fourth consecutive year of decline would prove devastating to its business and its future.
Company president Walter Brant explains, “Indiana has lost a major chunk of its manufacturing base over the past five years. Even if a distributor is a single-source provider for a customer, if that customer’s needs diminish, it affects the distributor. When the needs of an entire customer base decline, the distributor had better find a source to replace the missing sales.”
Brant knew the time frame for action was immediate. While acquisitions could help, finding the right company at the right price might take too long. Battling for market share by taking business away from competitors often resulted in reduced margins, and scratch starts had long lead times before the company would see a return on investment. Given these limitations, Brant turned to strategies that delivered faster results. He identified flexibility, speed and new alternative marketing channels as the three best weapons to protect Indiana Oxygen’s viability for future success.
The compressed gas industry has definite logistic limitations. The steel gas cylinders are heavy and large, meaning distribution and shipping costs are significant. The farther the distance between distribution and the customer, the greater the impact on costs. The company had to find alternative channels for its products that minimized the impact and protected profitability.
In addition, the company sensed internal needs for improvement. The need for rapid decision making and company-wide communication was paramount. The company responded and revised its organizational chart to eliminate unnecessary management layers, making the flow of information faster and easier.
Turning to its employees, Indiana Oxygen held a strategic summit in January 2003. More than 24 percent of its staff participated, helping identify and prioritize the problems the company faced. Long- and short-term solutions were suggested, and with their implementation, the company was able to recognize growth of 18.2 percent in 2003, despite a decline of 15 percent of its base customers.
When 2003 brought a “merger and acquisition frenzy” among independent welding supply and gas companies, family-owned Indiana Oxygen was primed to survive. A key to this tenacity is flexibility in product delivery and marketing. By utilizing drop-ship and common carrier for relatively smaller and lighter pre-packaged products, Indiana Oxygen continues to expand into more foreign markets. The company’s unique Internet “fishing” process baffles competitors and has led to a two-year growth of nearly 1,100 percent in its electronic sales. Indiana Oxygen plans to expand its electronic sales to South America, Southeast Asia and the Orient in 2004.
Brant comments, “Despite arguments over foreign manufacturing capturing U.S. market share, Indiana Oxygen finds a healthy appetite overseas for American–made products. Making those products easy to find and easy to purchase will continue to be Indiana Oxygen’s primary focus.”
Closer to home, the company has acquired a former independent distributor in southern Indiana and will open another scratch-start retail branch in Seymour, Ind. Brant was elected president of the Gases and Welding Distributor Association in 2003, and in June of 2004, he was named a finalist in Ernst & Young’s Entrepreneur of the Year program.
Company president Walter Brant explains, “Indiana has lost a major chunk of its manufacturing base over the past five years. Even if a distributor is a single-source provider for a customer, if that customer’s needs diminish, it affects the distributor. When the needs of an entire customer base decline, the distributor had better find a source to replace the missing sales.”
Brant knew the time frame for action was immediate. While acquisitions could help, finding the right company at the right price might take too long. Battling for market share by taking business away from competitors often resulted in reduced margins, and scratch starts had long lead times before the company would see a return on investment. Given these limitations, Brant turned to strategies that delivered faster results. He identified flexibility, speed and new alternative marketing channels as the three best weapons to protect Indiana Oxygen’s viability for future success.
The compressed gas industry has definite logistic limitations. The steel gas cylinders are heavy and large, meaning distribution and shipping costs are significant. The farther the distance between distribution and the customer, the greater the impact on costs. The company had to find alternative channels for its products that minimized the impact and protected profitability.
In addition, the company sensed internal needs for improvement. The need for rapid decision making and company-wide communication was paramount. The company responded and revised its organizational chart to eliminate unnecessary management layers, making the flow of information faster and easier.
Turning to its employees, Indiana Oxygen held a strategic summit in January 2003. More than 24 percent of its staff participated, helping identify and prioritize the problems the company faced. Long- and short-term solutions were suggested, and with their implementation, the company was able to recognize growth of 18.2 percent in 2003, despite a decline of 15 percent of its base customers.
When 2003 brought a “merger and acquisition frenzy” among independent welding supply and gas companies, family-owned Indiana Oxygen was primed to survive. A key to this tenacity is flexibility in product delivery and marketing. By utilizing drop-ship and common carrier for relatively smaller and lighter pre-packaged products, Indiana Oxygen continues to expand into more foreign markets. The company’s unique Internet “fishing” process baffles competitors and has led to a two-year growth of nearly 1,100 percent in its electronic sales. Indiana Oxygen plans to expand its electronic sales to South America, Southeast Asia and the Orient in 2004.
Brant comments, “Despite arguments over foreign manufacturing capturing U.S. market share, Indiana Oxygen finds a healthy appetite overseas for American–made products. Making those products easy to find and easy to purchase will continue to be Indiana Oxygen’s primary focus.”
Closer to home, the company has acquired a former independent distributor in southern Indiana and will open another scratch-start retail branch in Seymour, Ind. Brant was elected president of the Gases and Welding Distributor Association in 2003, and in June of 2004, he was named a finalist in Ernst & Young’s Entrepreneur of the Year program.